Global Daily Tax News, Taiwan Highlights Individual Tax Rules For Online Workers, (Sep 2, 2025)

Taiwan's tax agency has issued a statement highlighting the tax rules that apply to income earned by Taiwanese individuals online in respect of services provided to overseas companies.

The tax agency noted: "An increasing number of Taiwanese professionals are employed by overseas companies, choosing to reside domestically while providing services, communicating with overseas teams through video conferencing or email to complete various projects or daily work. Labor compensation obtained from overseas employment for services provided within Taiwan constitute Taiwan-sourced salary income and is legally required to be reported on individual income tax returns."

The tax agency stated: "According to Paragraph 3, Article 8 of the Income Tax Act, compensation for labor services provided by domestic residents within Taiwan constitutes Taiwan-sourced income, regardless of whether the employer's location or the salary remittance account is located within or outside of Taiwan."

The tax agency provided the example of a Taiwan-based software engineer employed by a Silicon Valley startup. It highlighted that tax remains due in Taiwan, regardless of whether the work was carried out for a foreign company, and regardless of the fact their salary was remitted monthly by the US company to a US bank account. "Although the salary was not remitted to a domestic account, since the labor services were provided in Taiwan, their salary income constitutes Taiwan-sourced income and should be included in their 2024 individual income tax return," the tax agency said.

The tax agency encouraged taxpayers who have failed to report such income to do so voluntary, free from penalties but with the inclusion of interest on the amount due.